Welcome to the Lexicon of Real Estate Terms
Navigating the world of real estate can be daunting, especially with the myriad of terminology that pervades the industry. Our Lexicon of Real Estate Terms is here to simplify your experience, providing you with more than 3,300 terms and definitions and 33,000 Quizes to help you feel comfortable using modern real estate language.
This comprehensive guide serves as a quick reference for various audiences, whether you are a home buyer or seller, a real estate professional, a business student, an investor, or an attorney. We understand that mastery of the language is crucial in making informed decisions in the real estate market, and our lexicon is designed to empower you.
What You’ll Find in Our Lexicon:
Our lexicon includes detailed definitions for real estate topics from A to Z. Whether you’re looking to understand key concepts for personal knowledge or to enhance your professional repertoire, you’ll find terms related to:
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Appraisal: Learn about the process of determining a property’s market value.
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Architecture: Explore different styles and terminologies that define building design.
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Brokerage: Understand the role of real estate brokers and the services they provide.
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Construction: Familiarize yourself with the terms used in the building process.
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Debenture: Discover financial instruments that could impact real estate investments.
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Flood Plain: Understand the risks and regulations associated with properties in flood-prone areas.
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Negative Amortization: Get insights into loan types that increase in balance over time.
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Security Instrument: Learn about the agreements that secure a loan against a property.
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Subprime Loan: Understand the implications of loans given to borrowers with poor credit.
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Underlying Mortgage: Familiarize yourself with the financial obligations tied to a property.
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Zoning: Get to grips with laws that define how land can be used.
In addition to these definitions, our lexicon provides a wealth of resources, including:
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Common abbreviations used in real estate communications.
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Mathematical formulas essential for calculating mortgage payments, investment returns, and more.
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Charts and diagrams to visually represent complex concepts and processes.
Why Use Our Lexicon?
By utilizing this resource, you’ll gain confidence in your understanding of real estate terminology. Whether you’re conducting research, preparing for a transaction, or simply looking to expand your knowledge base, our lexicon ensures you have access to the information you need at your fingertips.
Join us in diving into the intricate world of real estate language, and empower yourself with the terminology that shapes the industry. Feel free to explore and reference frequently; your journey into mastering real estate has just begun!
A Core-Based Statistical Area (CBSA) is a census bureau term applied to all statistical area designations based on a central city of at least 10,000 population. It includes both Metropolitan Statistical Areas and Micropolitan Statistical Areas.
CoreLogic is a leading provider of data and analytics for real estate, offering comprehensive information on property value, mortgage, risk assessment, and more. CoreLogic's REALQUEST platform delivers detailed reports and insights critical for real estate professionals.
CoreNet Global is an esteemed organization that was established in 2002 through the merger of the National Association of Corporate Real Estate (NACORE) and the International Development Research Council (IDRC). It functions as a network for sharing global, regional, and local corporate real estate knowledge and practice.
A corner lot is a land parcel that is bounded on at least two sides by the intersection of two roads. Corner lots are valued both for their accessibility and visibility in commercial real estate and may present unique benefits and challenges for residential development.
A corporation is a legal entity properly registered with the secretary of state, characterized by limited liability, perpetual life, freely transferable shares, and centralized management.
Corporeal refers to tangible, visible physical property. It encompasses both real and personal property that can be seen and touched, such as buildings, fences, and pavement, as opposed to intangible assets like easements.
A correction deed is a legal document used to amend or correct an error or omission in a previously recorded deed, ensuring the property's title is accurately represented and legally sound.
A corridor in real estate refers to a long, narrow strip of land dedicated to a specific purpose such as transportation routes, utility lines, or communication cables. The use of corridors is critical in infrastructure development, providing a streamlined and organized space for essential services.
The Cost Approach is a real estate appraisal method that estimates the value of a property by calculating the cost of reconstructing the structure on the same piece of land. This approach considers the depreciated reproduction or replacement cost of improvements, plus the market value of the site.
Cost basis refers to the original value of a property for tax purposes, adjusted over time for improvements, deprecation, and other related factors. This concept is fundamental in real estate transactions for determining capital gains or losses upon the sale of the property.
Cost estimating in construction involves predicting the total costs of labor, materials, capital, and professional fees required to construct a proposed project.
Cost new rent refers to the minimum market rental rate needed to justify new construction projects in a real estate market.
The cost of capital is the rate that must be paid to attract sufficient funds for an investment venture. It is crucial for decision-making in finance, reflecting the opportunity cost of using funds over some alternatives.
The Cost of Funds Index is a published data series that reflects the average interest expense incurred by savings institutions for borrowing funds. Known for its use in determining rates for adjustable-rate mortgages, COFI is a significant benchmarking tool for lenders.
The Cost of Living Adjustment (COLA) is an increase in income or benefits, such as social security, to offset the reduction in purchasing power caused by inflation. COLA is often tied to the Consumer Price Index (CPI).
The Cost of Living Adjustment (COLA) refers to an increase in payment amounts, such as rent or salaries, based on the rate of inflation. It ensures that individuals or entities maintain their purchasing power as the cost of living changes.
The Cost of Living Index is an indicator that measures the relative expense of living in a specific area by comparing the prices of goods and services to a baseline, often representing an earlier year or different location.
Cost segregation is a tax strategy that helps businesses and property investors accelerate depreciation deductions. By identifying personal property assets and separating them from real estate, businesses can apply shorter depreciation periods to these assets, thereby realizing greater tax depreciation deductions in the early years.
The 'Cost to Cure' is the amount of money required to remedy a cause of depreciation in a property. A curable defect is one for which the cost to correct is less than the value added by the correction.
Cost-Benefit Analysis (CBA) is a decision-making process used to evaluate the financial and economic feasibility of a project or policy by comparing all direct and indirect positive and negative effects in monetary terms. This technique is often applied in public finance, environmental and business regulation assessment.
A cost-plus-percentage contract is a construction agreement in which the contractor is compensated with a specified percentage profit over and above the actual construction costs. This type of contract can lead to increased project costs due to the lack of incentive for the contractor to minimize expenses.
A leading provider of commercial real estate information, analytics, and online marketplaces, delivering real-time data on comparable sales, lease rates, absorption, and construction across various geographic markets.
Cotenancy refers to any arrangement of multiple ownership in real estate, including Tenancy in Common and Joint Tenancy, where two or more parties hold title to a property together.
A Cotenancy Agreement in a shopping center lease allows a tenant to reduce rent, decrease payments for common area maintenance, or terminate the lease if other named tenants cease operations, also known as 'going dark'.
The term coterminous in real estate refers to two or more arrangements, such as leases or agreements, that have the same period or ending date.
The Council of Real Estate Brokerage Managers (CRB) is an affiliate of the NATIONAL ASSOCIATION OF REALTORS® (NAR) and part of the Realtors National Marketing Institute (RNMI). It offers career-enhancing education and designation for real estate professionals.
The Council of Real Estate Brokerage Managers (CRB) is a professional organization dedicated to providing advanced learning opportunities and fostering the leadership skills of real estate brokerage managers.
The Council of Residential Specialists (CRS) is an affiliate of the National Association of Realtors (NAR) that offers educational and promotional resources for its members who are primarily involved in real estate sales or brokerage. The organization also offers the Certified Residential Specialist (CRS) designation.
Counseling in real estate entails advising clients on a wide range of investment or development matters. This can include selecting properties, structuring investments legally, and maximizing after-tax returns among other aspects.
The term 'Counselor' is commonly used interchangeably with 'attorney' or 'lawyer' to refer to an attorney at law. In a broader context within the real estate industry, it can also refer to an individual who provides specialized services required for specific loan programs or offers advice on financial matters related to real estate transactions. Comparable terms include Counselor of Real Estate.
A Counselor of Real Estate (CRE) is a professional designation granted to individuals who are recognized for their expertise, experience, and high ethical standards in the field of real estate. This designation is awarded by The Counselors of Real Estate organization, an international group of real estate professionals.
The Counselors of Real Estate (CRE) is a professional organization of real estate investment counselors and consultants. Affiliated with the National Association of REALTORS®, it awards the designation of Counselor of Real Estate and publishes the journal 'Real Estate Issues.'
A counteroffer involves the rejection of an initial offer to buy or sell a property, accompanied by a substitute offer with different terms. It is a critical component in real estate negotiations, encompassing factors like price, financing arrangements, closing costs, and more.
A coupon book is provided by mortgage lenders to borrowers, containing a set of preprinted coupons that detail the account number, payment amount, and due date for each monthly mortgage payment. It simplifies the payment process, helping borrowers keep track of their payments.
A court in real estate refers to various concepts including a government institution resolving legal disputes, a sports facility within a subdivision or apartment complex, or an open area next to buildings like courtyards.
A covenant is a legally-binding promise incorporated into deeds and other official instruments, stipulating the performance or non-performance of specific acts or the restriction or enforcement of certain property uses.
A legal clause wherein one party agrees not to engage in similar business activities within a specific geographical area and amass a following that provides competitive advantages, typically used in business sales or employment contracts.
A 'Covenant Running With The Land' is a legal stipulation imposed on property that binds current and future owners to adhere to specified restrictions or obligations. These covenants are usually included in property deeds and remain in effect even as the land changes ownership.
Covenants and Conditions (Restrictions), often referred to as CC&Rs, are contractual limits tied to the property that impose certain rules or obligations on property owners.
The CPM (Certified Property Manager) is a professional designation conferred by the Institute of Real Estate Management (IREM). It signifies a high level of competence and ethical standard in property management.
A 'Cram Down' refers to a situation in bankruptcy proceedings where a bankruptcy court forces creditors to accept terms of repayment that are less favorable than the creditors might have wanted. This is commonly applied to various classes of debt to reduce the amount due and reconfigure the debt structure to favor the debtor's repayment capabilities.
A crawl space is a narrow, unfinished area between the ground and the first floor of a building, typically not tall enough for standing, used to access electrical wiring, plumbing, and HVAC systems.
The CRB Certified Real Estate Brokerage Manager is a professional designation conferred by the Real Estate Business Institute (REBI) to signify excellence and advanced knowledge in real estate brokerage management.
Creative financing refers to any financial arrangement utilized to purchase real estate that deviates from the traditional mortgage offered by third-party lending institutions.
Credit in real estate finance pertains to the availability of borrowed money and the trust extended by lenders to borrowers. It also includes accounting implications, reflecting liabilities or equity on the right side of the ledger.
Credit (Mortgage) Scoring entails evaluating and rating a loan applicant based on their creditworthiness, impacting eligibility for standard or sub-prime mortgage terms.
Credit Default Swaps (CDS) are financial agreements that function as a form of insurance against the default of a borrower. They allow the transferral of credit risk between parties.
A Credit Default Swap (CDS) is a financial derivative contract in which a buyer makes periodic payments to a seller in exchange for compensation if a third party defaults on a loan or bond. Unlike insurance, the buyer doesn’t need to have a vested interest in the third party.
Credit enhancement refers to a range of strategies or instruments used to reduce the risk of lending to a particular individual or company, thereby increasing their credit quality.
Credit history refers to an individual's past behavior involving the taking out and repayment of loans and the use of revolving credit, such as credit cards. Credit histories are recorded by national credit reporting companies who issue credit reports. These reports are used by lenders to assess an applicant’s creditworthiness.
Credit life insurance is a policy that pays off a borrower's debt if they die or sometimes if they become disabled. It contrasts with mortgage insurance, which is specifically designed to protect lenders from defaults.
A credit limit represents the maximum amount a financial institution extends as a loan or line of credit to an individual or business based on their creditworthiness and financial background.
A Credit Rating (Report) is an evaluation of an individual's or business's capacity and history of debt repayment. It provides creditors with an understanding of a borrower's reliability, aiding in the decision-making process for loans and credit.
A Credit Rating Service or Credit Bureau is an organization that provides information regarding the creditworthiness of a prospective borrower. These agencies, also called consumer reporting agencies (CRAs), are essential for lenders to assess the risk of lending to individuals and businesses.
A credit score is a numerical expression that represents the creditworthiness of an individual, predicting the likelihood that the individual will default on a loan based on their credit history.
A Credit Tenant is a commercial tenant that is large, financially stable, and well-rated by credit agencies, which can influence favorable terms for mortgage financing based on the tenant's creditworthiness.
A Credit Union is a nonprofit financial institution that is federally regulated and owned by the members or people who use its services. Credit unions serve groups with a common interest, and only members may use the available services.
A creditor is an entity or person to whom money is owed by a debtor. In a strict legal sense, a creditor is one who extends credit to another for money or other property. More generally, a creditor is someone who has a legal right to demand and recover from another entity a sum of money on any account.
Creditworthiness is a measure assessing a person's ability to qualify for and repay a loan. It influences loan approvals, interest rates, and credit limits.
CREW Network is a pivotal business networking organization dedicated to promoting and supporting the achievements of women in the commercial real estate industry. With over 8,000 active members representing various roles in the sector, it serves as a key platform for professional growth and industry advancement.
Cropland is property devoted to growing annual agricultural products. It is distinct from pasture and grazing land or range land. Cropland is eligible for agricultural use exemptions under specific conditions.
Certified Residential Specialist (CRS) is a designation awarded to experienced REALTORS® who have completed advanced training and demonstrated outstanding achievement in buying, selling, and managing residential real estate.
A Certificate of Reasonable Value (CRV) is a document issued by the Department of Veterans Affairs (VA) that establishes the maximum loan amount that the VA will allow for a property. It is a critical component in the VA home loan process, providing assurance of the property's value.
A cul-de-sac is a street with an intersection at one end and a rounded, closed turning area at the other, often valued in residential subdivisions for the privacy and limited traffic it provides.
A culvert is a structure that allows water to flow under a road, railroad, trail, or similar obstruction. They are often used for drainage purposes, constructed using materials like concrete, corrugated steel, or PVC.
Cumulative zoning is a type of zoning ordinance that permits lighter or less intense uses within areas designated for heavier or more intense uses. This can foster a mix of density and usage, potentially allowing for greater flexibility in urban planning and development.
Curable Depreciation refers to a type of property deterioration that can be corrected at a cost that is less than the value it will add to the property.
Curb appeal refers to the attractiveness of a property, particularly residential homes, as seen from the street, and is a critical aspect in real estate marketing and valuation.
Current yield is a measure of the annual income (interest or dividends) of an investment compared to its current price. It's a useful metric for investors looking to understand the income-generating potential of their investments over a short-term period.
Curtesy is a legal term referring to the right of a husband to all or part of his deceased wife's real estate, regardless of the provisions in her will. This right traditionally exists to ensure the husband's financial stability after his wife's death.
A custom builder constructs unique homes based on client specifications and architectural designs, offering bespoke solutions different from production or tract houses.
Daily Traffic Counts measure the number of vehicles traveling on a given highway or street per day. This data, often collected by state departments of transportation, is crucial for assessing road usage and planning.
Damages refer to the monetary compensation recoverable by a person who has been injured due to the act or default of another. This can include physical harm, property damage, or violation of rights.
A Data Plant comprises compiled statistical information used by appraisers or other real estate professionals to evaluate property values, market trends, and comparable sales data, playing a pivotal role in real estate appraisal and market analysis.
The 'Date of Appraisal' refers to the specific date on which the value of a property is determined by an appraiser. It is a crucial component in real estate transactions as it establishes the value of a property at a specific point in time, impacting sale prices, taxes, and loan terms.
De Minimis Planned Unit Development (PUD) refers to a type of PUD where the common area characteristics have a minimal effect on the overall property value. These developments contain limited shared spaces and amenities.
In real estate, a dealer (tax) is an individual or entity that buys and sells property for their own account, with such property considered as inventory. Consequently, any gains from the sale are treated as ordinary income for tax purposes.
A debenture is a type of debt instrument that is not secured by physical assets or collateral. It relies on the creditworthiness and reputation of the issuer for backing.
In real estate and accounting, a debit refers to an amount that is charged to a party, either in the context of a closing statement or as entries on the left side of a general ledger.
Debt is an obligation that requires one party, the borrower or debtor, to pay money or other agreed-upon value to another party, the lender or creditor.
Debt capital refers to money loaned on a long-term basis that is used to finance an investment, including real estate. Unlike equity capital, debt capital must be repaid to the lenders with interest.
The Debt Coverage Ratio (DCR) is a key metric used in real estate to assess the ability of an income-producing property to cover its annual debt payments. It helps lenders and investors evaluate the risk associated with a property loan.
The Debt Coverage Ratio (DCR) is a financial metric that measures the ability of a property to cover its operating expenses and debt obligations. It is widely used by lenders and investors in commercial real estate to assess the risk associated with a particular investment.
Debt service refers to the periodic payments, typically consisting of both principal and interest, made on a loan. It is a crucial concept in real estate finance and investment, as it impacts cash flow, profitability, and overall financial health of a property or investment.
The Debt Service Constant, also known as the Mortgage Constant, is a measure used in real estate finance to determine the annual debt service (principal and interest payments) payment required per dollar of the loan amount.
Debt Yield is the Net Operating Income (NOI) divided by the amount of debt, primarily used by lenders to determine the sufficiency of a property's income to cover its debt service.
The Debt-to-Income Ratio (DTI) measures a borrower’s ability to manage monthly payments and repay debts. This ratio compares an individual's gross income to their combined housing and nonhousing expenses.
The Debt/Equity Ratio is a measure used to evaluate a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.
In the context of real estate, a debtor is a person or entity obligated to repay a debt. The debtor obtains a loan or other form of credit, typically used to purchase property, and is legally responsible for repaying the borrowed amount according to the agreed terms. The opposite of a debtor is a creditor, who provides the loan or credit.
A 'Debtor in Possession' (DIP) is a status granted to a debtor who retains control of property and continues to operate its business while undergoing a bankruptcy proceeding, typically under Chapter 11 in the U.S. Bankruptcy Code.
In real estate, a 'Declaration' refers to formal pleadings by a plaintiff as to the facts and circumstances that gave rise to his cause of action. Additionally, it is a legal document used to create a condominium, including vital details about individual units and common elements.
A Declaration of Condominium Ownership is a legal document required for the establishment, management, and governance of a condominium association according to relevant state laws. This document outlines the rights and responsibilities of unit owners, common areas, and the owners' association.
A Declaration of Homestead is a legal document that establishes a homeowner's protection under homestead laws, often providing creditor protection for the primary residence.
A Declaration of Restrictions is a set of restrictions filed by a subdivision or condominium developer, specifying rules that must be followed by property owners to maintain uniformity and uphold property values.
A written statement by a trustee acknowledging that the property is held for the benefit of another party.
Declining Balance Depreciation is a method of depreciation, often used for income tax purposes, whereby a rate is applied to the remaining balance to derive the depreciation deduction. Compare with Accelerated Depreciation. See Modified Accelerated Cost Recovery System.
A decree is an authoritative order or decision made by a court, which can mandate compliance or resolve disputes between parties, often having significant legal consequences.
A legal ruling issued by a court that determines the outstanding mortgage amount and mandates the sale of the property to pay off the debt.
Dedication refers to the act of setting aside and transferring ownership of private land by its owner to a public agency for public use, which must be formally accepted by the governmental unit.
A deductible is the amount a homeowner must pay out-of-pocket toward a covered damage or loss before their insurance company steps in to cover the remaining costs. Policies with higher deductibles typically come with lower premiums.
